GBP/USD Falters at Resistance After UK 1Q GDP Misses Estimates

by
David Maycotte

The British Pound fell against the US Dollar as quarter-on-quarter UK 1Q GDP missed analyst expectations. The U.K. economy was estimated to expand at its fasted pace in four years in the first quarter abetted by record-low interest rates. Though the benchmark growth-rate missed expectations, UK Chancellor Osborne says GDP figures show Britain is coming back.

“The stronger recovery in the U.K. puts increased pressure on the central bank to normalize monetary policy sooner rather than later,” says Song, “and Governor Carney can do little to halt the appreciation in the sterling as it helps to achieve the 2% target for inflation.”

DailyFX Technical Strategist Jamie Sattele says the upside momentum is pathetic. “RSI hasn’t been above 70 since October so this doesn’t even feel like a bull,” Saettele says, “but respect upside as long as the trend line that extends off of the November and February lows holds.” He says that if GBPUSD pushes to new highs to watch for resistance near 1.9685.